Tech Talk

December 28, 1998

January 4, 1999

January 11, 1999

Tech Week

Under a program designed to more accurately screen blood donations for diseases, Gen-Probe Inc. has reported that it will work with the American Red Cross and Chiron Corp., a large Bay Area-based biotechnology concern, to provide rapid testing kits designed to detect the hepatitis C virus and HIV-1, the virus that causes AIDS.

The deal is worth about $7 million to Gen-Probe, according to the company. The program is designed to help the Red Cross more effectively screen for blood-borne diseases in donated blood and plasma, using nucleic acids instead of antibodies to provide for an earlier detection of the diseases.

Problem is, such a test is not yet developed and cleared for use in this country. To this purpose, the San Diego-based company said it is submitting paperwork to the Food and Drug Administration to get the authorization to conduct trials of the system. If all goes according to plan, the two companies will provide the necessary equipment for the Red Cross to test the system at the National Genome Testing Laboratory in San Diego starting early this year.

So what is the advantage of the new test? Most current diagnostic tests are designed to detect the antibodies that the body generates in response to an invading pathogen. The drawback to this approach is that it can take a while before a large enough number of antibodies are developed to allow detection; precious treatment time that is essentially wasted.

Under Gen-Probe's system, the test would detect the RNA's (ribonucleic acids) of the disease in question. In theory, this would allow for a much earlier detection of the disease, thus helping the patient seek treatment earlier. If approved by the FDA, it would become the first diagnostic test to use RNA detection used in blood screening, according to Gen-Probe.

"While transfusion in the United States today is safer than ever before, the American Red Cross continues to investigate new methods for improving the safety of blood components and plasma derivatives," Brian McDonough, chief operating officer for American Red Cross Blood Services, said in a statement. "Our collaboration with Gen-Probe to investigate this new technology may provide the Red Cross with access to the most advanced testing technology available, which we believe will further enhance the quality of our products and services to hospitals and patients nationwide."

The nucleic acid tests designed by Gen-Probe have gained the company some attention lately. In October, Gen-Probe received $4.3 million from the National Heart, Lung and Blood Institute to develop a nucleic acid amplification test for the HIV-2 and hepatitis B viruses, which would also be used for blood screening. This came in addition to the $7.7 million, three-year contract the company had already won for development of its HIV-1 and hepatitis C virus tests.

The patents covering the RNA testing technology were also the subject of a recent court case which Gen-Probe won in August against the Center for Neurological Study, a San Diego-based nonprofit agency where a Gen-Probe scientist had previously worked. Gen-Probe has sued Amoco, one of the world's largest oil distributors, for inducing the lawsuit, claiming Amoco wants to get Gen-Probe's patents for its own diagnostics business. Gen-Probe is owned by Japan-based Chugai Pharmaceuticals, which bought the company in 1989 for $110 million.

Telecom Mega-Merger

Another mega-merger in the telecommunications industry likely will have some jolting effects for the San Diego region. Bell Atlantic Corp. is apparently in talks to acquire cellular-provider AirTouch Communications Inc. in a deal that industry sources say could be valued around $45 billion.

Whether such a plan will pass muster with regulators is a question, although the Federal Communications Commission has yet to meet a big-bucks merger that it didn't like. But other issues may have a sticking point, and that it where San Diego comes in.

Bell Atlantic is also trying to put the wraps on another merger -- this one with GTE Corp., which provides both local phone and wireless services in Southern California, including San Diego. Problem is, a merger with both GTE and AirTouch would give Bell Atlantic ownership of the two dominant cellular providers in San Diego. The company faces a similar situation in Cleveland, where both carriers also have networks.

Federal law prohibits one carrier from holding two major wireless licenses in a single market. In this scenario, GTE's San Diego venture would likely be the one sold. Bell Atlantic, through a previous joint-venture arrangement with AirTouch, is prohibited from owning any holdings that would compete directly with AirTouch. According to the Wall Street Journal, Bell Atlantic would have to sell off a total of $5 billion worth of wireless properties that include San Diego in order to complete both mergers.

So what will this do to San Diego's wireless market, already recognized as one of the most competitive in the nation? Hard to say. GTE has a sizable business here, but most of the country's largest carriers are already here (this includes Sprint and Nextel) as well as a dominant regional player (Pacific Bell). AT&T is a possible buyer, but it is building a nationwide digital network using a different standard than GTE uses here. Other smaller players may be interested, but wireless analysts say markets are likely to shake out a couple of players each in the coming years.

December 28, 1998

January 4, 1999

January 11, 1999